Nordic Manufacturing Stabilizes as Production Jumps

(Corrects name of bank in third paragraph in story first
published on Feb. 1.)

Feb. 1 (Bloomberg) -- Swedish and Norwegian manufacturing
improved last month as production surged, signaling a revival in
the two largest Nordic economies amid optimism European leaders
have contained the euro area’s debt crisis.

Sweden’s purchasing managers’ index rose to a seasonally
adjusted 49.2 in January from 44.6 the previous month, Swedbank
AB, which compiles the index, said today. Norway’s index rose to
50.5 from 50, indicating manufacturing expanded for a third
month, Danske Bank A/S said. Readings above 50 signal an
expansion. Analyst surveys estimated readings of 46.1 in Sweden
and 50.4 in Norway.

“Today’s PMI reading indicates a faster and more promising
manufacturing recovery than we’d forecast,” which “adds to our
view that the Riksbank will take a pause in February,” Per
Sellden, an analyst at Swedbank AB in Stockholm, said in a note.
In Norway, increasing delivery times, falling inventories and
rising orders “could indicate that production will rise going
forward,” Danske Bank said.

Exports from the Nordic countries have fallen amid slowing
demand from Europe where austerity measures in nations such as
Spain have trigged a recession. Sweden relies on foreign sales
for about half its output, while Norway, western Europe’s
largest oil producer, sells 40 percent of its production abroad.

The Swedish krona gained 0.4 percent to 8.6027 per euro as
of 11:09 a.m. local time. The Norwegian krone slid 0.3 percent
to 7.4390 versus the common currency.

Rate Moves

Sweden’s central bank cut its main lending rate a quarter
point for a fourth time in a year in December to 1 percent,
while Norway’s central bank in December left rates unchanged at
1.5 percent for a fifth meeting to support weak growth.

Sweden’s production sub-index rose to 53.8 from 45.3 while
the order index rose to 49.7 from 41.3. The employment index
rose to 40.8 from 40.5 and the delivery time index gained to
50.4 from 45.3. In Norway,

In Norway, the index measuring production rose to 50.4 from
49.5 while the order index rose to 51.3 from 49.9.

Swedish growth will recover to 1.1 percent this year after
slowing to 0.9 percent in 2012 from 3.7 percent the previous
year, the government predicted on Dec. 21. Growth in Norway’s
mainland economy, which excludes oil, gas and shipping, is
estimated to slow to 3 percent in 2013 from 3.75 percent last
year, according to central bank forecasts.

A separate report today showed Norway’s unemployment rate
rose to 2.7 percent in January from 2.4 percent in December,
according to the Norwegian Labor and Welfare Service.